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Personal Loan payoff - score change?

folks19
Frequent Contributor

Re: Personal Loan payoff - score change?


@mimi64 wrote:


I don't believe this is the case. I understood that mortgage loans are not calculated with other loans. By paying off yout only non-mortgage installment laon, you have 1 less active credit type, if that was the only non-mortgage installment laon.


I'm not sure about that. We paid off our mortgage 8 years ago and I've achieved an 850 with just one active personal loan. When that loan was paid off, my score dropped.


@mimi64 Not sure what you thought I said. Didn't you say that you lost points when you paid off you installment loan? In general, the more types of credit you have, the better, but that doesn't mean you can't have a perfect score withour every type of credit.

Message 11 of 15
Kforce
Valued Contributor

Re: Personal Loan payoff - score change?


@expatCanuck wrote:

I have a new mortgage (refi) from which my score has started to recover, and, for another month, a personal loan.  Final payment next month.

 

Thick, clean file.  Rarely does CC util exceed 1%.

 

When the loan is paid off, should I anticipate a score change and, if so. which way?


Paying off your loans saves money, and is in my opinion far more important than a few Fico points.

Celebrate the loan being paid off and ignore what ever score change there is.

 

 

 

Message 12 of 15
KorbenD
New Member

Re: Personal Loan payoff - score change?

I paid off several personal loans and noticed no real change to any of my scores.  However, the benefit was getting rid of some very high interest debt.

Once I started focusing on credit card debt, I noticed a consistent increase in score as they were paid down though.

Message 13 of 15
mimi64
Valued Member

Re: Personal Loan payoff - score change?

Yup. I must have read it wrong. Sorry about that. 

 

But as you noted, it's definitely true that one does not need a mortgage or auto loan to get to 850. Any installment loan will do.

Message 14 of 15
folks19
Frequent Contributor

Re: Personal Loan payoff - score change?


@mimi64 wrote:

Yup. I must have read it wrong. Sorry about that. 

 

But as you noted, it's definitely true that one does not need a mortgage or auto loan to get to 850. Any installment loan will do.


But having more types of credit may help you get your score to 850 faster. Not saying that anyone needs an 850 score, and it's probably not wise to get a mortgage just for score purposes, but I'm just throwing that out there.

Message 15 of 15
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